From the time oil is pulled from the ground to the moment it is refined as petrol and pumped in your car, it travels a difficult long and winding road, sort of like driving up Mount Psiloritis. . in reverse.

We are constantly bombarded with words and phrases such as: "a barrel of crude" and "OPEC" and "off-shore drilling."

However, the only thing most people want to know is: how many euros will it take to fill their tanks? And, oh yes, one more thing: why is the price of gas on Crete 10 to 15 cents higher than the rest of Greece?

In an attempt to arrive at these answers, this reporting team spoke to Haris Mavrakis, president of the Union of Petrol Stations in the Iraklion Prefecture.

In regard to gas prices in Crete, Mr. Mavrakis explained that the fuel market in Greece is distorted and does not function as a free market.

"It might present itself as a free market on paper but it is not so in practice," he said.

He went on to explain that there are only two refineries in all of Greece, in Aspropyrgo and Thessaloniki, and there is a general opacity regarding the manner in which they arrive at their prices.

"Secondly, you have the oil companies that play with giving different discounts to service stations, according to the area," he said.  "In Continental Greece today there are 18 companies and a very competitive market. In provincial and island Greece there is no competitive market due to the lack of storing facilities. 

"There are three companies, EKO, BP and SHELL, and they control 90 per cent of the Cretan market with no chance for other companies to penetrate the market so that a functioning competition may develop."

Another factor, according to Mr. Mavrakis, is the exclusivity deals some stations have with the companies.

"A gas station owner will exclusively tie-up with the company that will install his pumps and build the station and then sell him fuel at any price the company wishes," he said. "This service station owner is not able to shop around for a better wholesale price.

"What has bothered us unimaginably also is that there is a big divergence in wholesale prices between mainland and us, and we are fighting to get some explicit answers from the government regarding this problem."

Mr. Mavrakis said that two letters have been sent to the minister of development, and they are still waiting for answers.  

Why haven't they answered your request? he was asked

"Everyone knows what goes on but no one wants to touch the subject," he charged. "The companies say that they don’t make big profits. Except that these companies are vertically integrated and have the ability to transfer their profits to any of their many merchandising stages, the refining stage for example, so they can appear to be showing a loss. This is an economic game that the Ministry of Development is aware of and the Hellenic Committee of Competition, which, by the way, has imposed certain rules, but unfortunately certain things in Greece do not work and I don't know the government's role in all this."  

One bright spot in the local price of gas is that it is four to five cents cheaper in the Iraklion province than the rest of Crete.

"Iraklion prices are cheaper because we are much better organized with legal and tax consultants," he said. "Also, we give the necessary tools to the station owners so that once their agreements with the companies expire they don't renew without knowing how they can obtain the best deals, so they, in turn, can offer a better retail price to the consumer."

Mr. Mavrakis went on to explain just how service stations arrive at their daily prices.

"Every day each company announces its wholesale prices because the refinery prices change daily. Now, a service station where the owner invested his own money can negotiate from a better place than the one which was financed by the oil company. But also, if a service station has a small consumption, the company will not offer any discount. 

"Today, EKO sells wholesale unleaded at 0.954, BP 0.950 and Shell 1.08. Because I have a free and clear service station and a good discount from the company, I am selling at 0.938 retail, which is under EKO wholesale. However, someone who must buy at 0,954 from EKO will sell at one euro."

Mr. Mavrakis indicated that station owners are very conservative in the amount of profit tacked onto a litre of gas.

"In a free market there is no profit rate," he explained. "But neither do we pick retail prices at random. We are compelled by law to display our prices (on the side that traffic moves) and we are fighting for better wholesale prices like the rest of Greece, so we can display better retail." 

In Crete there are two storing facilities, one in Linoperamata (outside of Iraklion) where BP and EKO have 25,000 cubic meters for storage, and the other in Aghio Onoufrio where SHELL has 3,500 cubic meters and Silk Oil has 2,500. 

"This prohibits any other company from entering the Cretan market," he said. "Some companies are trying to enter our market with tankers, but service stations are afraid to deal with them because in bad weather or during high winds they cannot restock. Plus a tanker has a much higher operating cost than a permanent land installation which raises the retail price. It’s most urgent that bigger storage installations are built so more companies can enter the Cretan market and help bring retail prices down."

Mr. Mavrakis went on to explain that fuel pricing is not necessarily shaped by the cost of a barrel of crude oil.  

It depends on the availability and demand of the ready product in the refineries," he said. "Also, the price depends on the relationship of the dollar to the euro, since oil is negotiated in dollars, but we buy with euros. If the euro appreciates then fuel prices drop; if the euro depreciates fuel prices rise.

"Fuel has roughly 60 per cent tax. This means that one litre of petrol has a 0.366 special consumption tax, plus VAT, which is automatically 0.44 – 0.45 cents. If we add all margins involved such as profits of companies-tankers-service stations you put another 0.20 cents into the equation, bringing it up to 0.65 cents. So even if the price of a barrel was zero, the consumer would still have to pay 65 cents for gas, which is a constant cost."

In conclusion, Mr. Mavrakis said: "I want to believe that we will have developments and shortly we will get some answers. If not, we are prepared to take steps. We ask for the collaboration of all prefectures in Crete, all municipalities and the district to help us in our efforts. However, if needed we will only do two-hour work stoppages instead of a full strike so the people and our visitors are not inconvenienced as much.

"We ask for help from all of you, the media, the people and the hoteliers’ association because we want to continue showcasing our problems in hopes of a just solution."